I am working to determine how much $ I will need in retirement. Should I be using post tax calculations on the taxable areas - i.e. 401K which is all pre-tax? So if using the 4% rule for example I would need to deduct the expected tax off my total 401K amount and then apply the rule? I am only using the 4% rule as an example - I understand it may not be the best barometer... thanks

If you have most of your retirement assets in Traditional 401K/IRA accounts yes you should take taxes into account. The way I do that is by including taxes in my estimated annual expenses (withdrawal). I'd set it up so you can vary the tax rate if you move to a different state.

There are so many factors involved that it is hard to say. Certainly the safest (i.e., most conservative) approach is to use post tax.

I periodically do a pre tax and post tax analysis of my asset allocation. Because we hold only stocks in our Roth accounts and almost all of of non equities are in tax deferred, the difference is a shift of about 5% or so. In our case I know the ratio of tax free to tax deferred and am aware of the total cost of Roth conversions and our marginal tax rates in retirement. Marginal tax rates discount our tax deferred holding by about 30%.

The difficulty in the pre-retirement scenario you have put forward is that it may be difficult to estimate your marginal tax rate during the early years of your retirement, and the value of your taxable account and cost basis may radically change. Do you anticipate a number of low income years - perhaps a few years of retirement prior to taking SS benefits? If yes, this adds to the complexity of the calculation. Does one withdraw from taxable with a zero long term capital gains rate or draw down an IRA prior to RMD's?

I don't mean to discourage you from using a post tax planning approach. I just think it is very hard to do accurately unless you are very close to retirement.

As others have noted, determining the "expected" tax may not be straightforward.

One can make a quick 'n' dirty estimate using rows 196-207 on the 'Misc. calcs' tab of the personal finance toolbox spreadsheet. Make the appropriate entries, copy the four indicated values to the 'Calculations' tab, ensure your filing status there is correct, and you have an estimate.

To determine spendable funds, yes you need to account for taxes. This will apply to pre tax retirement accounts (401k, IRA, etc.) and SS. Also, taxable accounts will be subject to capital gains when withdrawn. Tax planning is an integral part of retirement planning, and can offer opportunities to reduce taxes for some. For example, you pay taxes when contributing to or converting to a Roth IRA. However, all Roth earnings and distributions are tax free.